Does the UK really have a Single Currency "Opt Out"?
Reviewing the 'Maastricht' Treaty on European Union, it is noted:
- Under Protocol 11, the UK's opt-out is from "Stage Three" of Economic and Monetary Union - and not "the Single Currency", full stop.
Stage Three seems largely about the preparation for the introduction of the Single Currency, and is described in passing rather than precisely and exclusively defined in the Treaty.
- Nowhere does the Treaty say that there are only three stages - although people widely assume it.
- Nor does it refer to a "final stage".
The UK's "Stage Three" opt-out was certainly applicable up to May 1998 when the decision was made as to which countries would initially take part. The EC Council of Ministers then decided which had a "derogation" (permission) not to join the Single Currency (Article 109K1). Countries whose economies don't meet the specified conditions (viz.'Reference Values') may be given it.
Thenafter, at regular intervals, and not less than once every two years, the Council will then review which countries have a derogation not to join. By just a qualified majority vote, the EC heads of government can "abrogate" (i.e. end) this permission and they must join the Single Currency! (Article 109K2). Under such voting procedure, there would then be no veto for the UK.
Unlike Denmark's opt-out (in Protocol 12), which confers a defined exemption, the UK's does not contain wording equivalent to "moves to end it shall only happen at the request of Denmark". Therefore it is possible to interpret that in future, the UK could be told to give up the Pound Sterling.
This would involve a different procedure for adopting the Single Currency to the early joiners (ref: the default procedure covered in Article 109L5).
Protocol 11(5) lists the Maastricht articles that do not apply to the UK - 109L5 is listed as not applying, whereas 109K1 and 109K2 are not mentioned.
Would Her Majesty's Government please confirm if a water-tight mechanism exists to prevent the UK being required to join a Single Currency at any time, and if so, detail what provisions supersede the potential loopholes described above?
The Treasury has had to reply to the question and in their response, they have totally skirted over the point that an opt-out is worthless if what it relates to isn't properly defined. Instead they waffle on about it being impossible to enter Stage 3 without a separate Act of Parliament! (When implementing EC Directives, over which we have no choice, we must also pass a "separate Act of Parliament").
Commentators may also note that it is not technically necessary for the UK to re-enter the ERM to qualify for the Single Currency (even though same was given as a reason for not admitting Sweden). Coincidentally observing the fluctuation bands for a specified period would meet the conditions of the small print.
In any case, by signing EC/EEC Treaties, we have committed to their goals - this was confirmed in a European Court ruling in Cases 161/78 and 44/84. The Maastricht Treaty (Art. 3a2) lists a single currency (meaning "only one" and not "a common currency for those that want one"). Member states also committed not to do anything that might jeopardise the achievement of Treaty objectives. (Art. 5)
To be sure of avoiding the Euro, Britain must leave the EU
Footnote: New numbering, Treaty of Amsterdam: Articles: 4, 10, 122, 123; also Protocol 25.
Article first summarised in 1996 (Eurofacts), then hosted on Keele CEG website.
This page updated: 17 March 2000